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Messages - Tim

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Real Estate / Re: Forming an LLC to Manage Real Estate
« on: August 22, 2017, 11:13:23 AM »
Since it would have been my spouse managing the company new "Management" company, I would have said it would offer services to other landlords; however, it appears I got ahead of her interest in managing any more properties that the two of ours that she manages for us already as owner.

Anyway, thanks Maccountant, you actually addressed my original question very clearly. Absent bringing in additional property management accounts, it does not look like this is a good idea given the "reasonable fee" restrictions and self-employment income tax issues.

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Taxes / Re: Startup expenses
« on: April 22, 2017, 08:13:32 AM »
No, the business does not yet have to exist. The key date is when you open for business. If a rental business, the first day you offer the property for rent. If you are offering services or merchandise, the first day you accept orders, etc. All expenses directly related to getting the business up and running before that date are start up expenses. Be careful though. You can only claim expenses that actually went towards the business (e.g., thinking you might sell Amway you travel to an Amway convention, but end up opening a eBay reseller business instead. The Amway travel would not be deductible as a startup expense). I'm not an accountant, so you will need to check before you file taxes, but as I recall only the first $5000 in expenses can be deducted in the first year. Any more than that must be treated as a capital expense and deducted in equal amounts over the next 15 years.

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FIRE / Re: What is my FIRE number
« on: April 22, 2017, 07:38:07 AM »
And depending on whether or not you buy medicare gap insurance (for what Medicare does not cover) at 65, your expenses definitely will go down at 65 when Medicare kicks in. There is a cost table online, but in your situation let's say Medicare is $200 per month, or $2400 per year. Expenses then go down by (8000 - 2400 =) $5600.

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Real Estate / Forming an LLC to Manage Real Estate
« on: April 21, 2017, 01:24:55 PM »
My wife and I own two rental properties. We have a positive cash flow so I would like to shelter that revenue. Since my wife actually manages the properties, can she form a sole proprietorship or LLC that we pay to manage the properties?

If so, I would then have all that revenue go to a SEP IRA that I would set up for the company. If not, any other suggestions on sheltering the positive cash flow that don't involve me spending money to incur additional expenses?

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